Russian President Vladimir Putin says that the country's economy is on the way to recovery.

Speaking in his live state-of-the-nation address, Putin pointed at a growth in some sectors of industry and agriculture and pledged that positive trends will continue next year. He said agricultural exports this year will top $16 billion, exceeding weapons exports.

The Russian economy contracted 3.7 percent in 2015 and the recession has continued this year under the combined blow of low oil prices and Western sanctions.

Putin said the government should encourage growth by offering support to farmers and create incentives for small business.

He noted that inflation, which stood at nearly 13 per cent last year, is expected to slow down to 6 per cent this year.

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